A Long Time at the Helm

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In 1979, when Hank Funsch joined Long Island-based Dayton T. Brown Inc. as its treasurer, spending decades with the same company was still a common practice. Thirty-one years later it’s a rare career that takes that course, but Funsch remains at the company as its CFO, a position he has held since 1987.

That’s not the only unusual fact associated with Funsch, who is 63. During his long tenure he has been remarkably close to the company’s information-technology systems, far more so than is typical even at other companies where IT reports to the CFO.

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Technology, in fact, is Dayton T. Brown’s business. The $40 million private company provides engineering and testing services for electronic equipment, mainly for the U.S. government, and publishes a wide range of technical manuals. A manufacturing division that produced precision sheet metal was shuttered in 2008.

The following is an edited transcript of CFO’s recent interview with Funsch.

It’s a long way back to remember, but what did you do before coming to Dayton T. Brown?

I was in public accounting for 10 years as a tax manager, first at Price Waterhouse and then at Hurdman & Cranston on Long Island. I was looking to find a position as a tax manager for a Fortune 500 company, the only kind that would be interested in hiring someone at my level of specialty. But Dayton T. Brown was a Hurdman & Cranston client, and after the company founder died I worked with them on the estate. All of a sudden they offered me the treasurer job. It was a total career change.

Why have you stayed at the company so long?

It was always challenging. I’ve never been bored. There were times when I did interview [elsewhere], before I got to the age where you feel you’re locking yourself in, just to make sure I felt comfortable about staying.

But the company has treated me very well. I may not have maximized my earning power, but it’s not all about money. There is a lot of diversity and no such thing as a typical day. I find a lot of ways to add value.

When did you start interfacing with the technology operations?

After just a few months. The information systems (IS) manager at the time was more of a political type of person. I made certain observations to the CFO and the chairman, and they told me I was now responsible for the department.

Did you have any technology background?

No. After I got that role I took courses at night on COBOL, just to learn what programmers did. The first two or three years, I probably didn’t add a lot of value.

When the first personal computers came out, IS didn’t feel we should be doing anything with them. They were toys. So there was a bit of resentment when we in finance decided to purchase the first IBM PC in 1982. We spent a huge amount of money for a limited amount of capability, when you look back. We had a specific task, our government billing process, that we wanted to automate because it was taking our accounting clerks 80 hours a month to prepare.

I remember there was a stigma associated with an officer of the company spending so much time in front of a computer. Nobody else had one. My boss seemed to be OK with it, but he had his doubts. Then Lotus 123 and Excel came out, and I became a power user in the latest spreadsheets.

What other technology-related things were you doing at the time?

I got deeply involved in system design and started to invest in management information system analysis. Then in the 1990s, when the Internet came along, I like to think we were in the forefront among companies our size. At a time when maybe half the managers in the company had never heard of the Internet, I started to write memos about it to operations and to my boss.

Was there a defining moment for you in your technology education?

In the 1990s we had some turf battles. When you start a local-area network, you can set it up in a lot of different ways. Our engineering and testing division had a lot of clout, and they wanted to take approaches that we in IS felt were not desirable. We were concerned there would be conflict between multiple systems that would cause network problems.

So I had to really bone up and become very knowledgeable in the workings of a LAN. When we brought in an outside consultant to help our chairman make the decision, he said it was unusual to see a CFO be such a technologist.

So have you maintained that level of scrutiny?

Around that time I asked our controller, Bill Courbaneu, to move to the IS department. He was a software junkie. He’d buy stuff at CompUSA, play with it at home, then start finding ways to use it at the office. He is still IS director today, and he is far and away the most talented IS person I’ve ever had.

I’m still involved, but not in the details anymore. I may ask a few questions before I’m willing to approve a request. I may override a decision, but more often than not Bill gets my blessing.

What’s the biggest crisis you’ve had to handle as a CFO?

I can’t say we’ve had significant crises, other than making sure we continue to win contracts. We did make a decision to close down our sheet-metal business, which was bread and butter until the 1990s and really dwindled after 2000. We had to figure out how to satisfy our existing purchase orders, so we needed to keep a certain workforce. To get people to stick around, we worked up an incentive program. That was a challenge, but it worked out OK.

Has the nature of the company’s work as a government contractor insulated it from the general financial crisis since 2008?

We did OK in 2008 and 2009, other than the manufacturing division. A bigger impact than the financial crisis has been the wars, particularly Iraq. More monies are being directed there and less to the inventory of components that we test.

What are you spending your time on these days?

Right now I’m in the process of training my replacement. I hired her two months ago. We’re also spending a lot of time at the front end of the business, analyzing the result of pricing strategies, win rates, capturing new customers, and so on.

And we have a phenomenal system, which we created in a five-year project that lasted into 2006, from which I’m easily able to pull real-time data into Excel. We have a lot of information that is available not only at the divisional level but also at the departmental level. A division may be doing well but one of its departments may be struggling. Years ago we wouldn’t have been able to tell that.

Do you have a retirement date in mind?

No, but I’m committed to staying until I’m 66. I may have an interest in staying involved part-time, if that works out for my boss, the company, and me. Right now it points in that direction, but a lot depends on the people I bring aboard.